South Korea Fines Google and Apple 63.7 Billion Won Over Payments

The Korea Media and Communications Commission imposed a combined fine of 63.71 billion won (approximately $47.6 million) on Google and Apple for forcing app developers to use their proprietary in-app payment systems and delaying app reviews. These are the first sanctions issued under the amended Telecommunications Business Act of 2021.

Google's fine reached 42.9 billion won, while Apple's fine was 20.81 billion won. The commission stated that although both companies technically allowed third-party payment systems, they imposed fees and restrictions that rendered the alternatives commercially unviable. Developers using third-party payment systems still incurred a 26% commission, on top of their own payment processing and operational costs.

The commission explained that Google restricted how prices were displayed across payment methods, while Apple required separate submissions for apps using external billing, and both companies restricted payment options outside of apps. It concluded that these practices left developers with little choice but to use the companies' proprietary payment systems, classifying them as severe violations due to the harm caused to competition, developers, and consumers.

The commission ordered both companies to cease the violations, amend their practices, publish corrective orders, and submit compliance plans and reports. Apple was also levied an additional fine for calculating its 30% commission on VAT-inclusive prices for Korean developers while applying the same rate to VAT-exclusive prices for foreign developers, generating approximately 149.6 billion won in extra commissions. Written decisions are scheduled to be issued next month.

What Do These Terms Mean?

In-app Payment: A system that allows users to purchase digital content or services from within a mobile app, with the app store platform taking a commission on each transaction.

Commission: A percentage or fixed fee deducted by the app store platform from the value of each sale made through a registered app.

Telecommunications Business Act: A Korean law regulating the activities of telecommunications companies and app platforms, which was amended in 2021 to prevent developers from being forced into a single payment method.